Showing posts with label Auto Insurance. Show all posts
Showing posts with label Auto Insurance. Show all posts

What is Commercial Auto Insurance? Covers and Costs

What is Commercial Auto Insurance

What is Commercial Auto Insurance?

Commercial auto insurance, also known as commercial vehicle insurance or business auto insurance, covers vehicles used for business purposes such as cars, trucks, vans, and trailers. A commercial auto policy should be obtained for any vehicle used to transport materials, tools and equipment, packaged items, or people.

Why is Commercial Auto Insurance Required?

Independent contractors and small business owners must protect themselves from third-party liability and property damage when using any vehicle for business reasons. 

Most personal car insurance policies do not cover accidents or events involving any vehicle used for business purposes.

What Does Commercial Auto Insurance Cover?

In Canada, a normal commercial auto policy is similar to the coverages found in a personal auto insurance policy. In Ontario, for example, a personal car insurance policy includes:

Liability to Third Parties:

Provides coverage if you are at fault in an accident that injures or kills someone or damages their property.

Direct Compensation Property Damage:

If you are partially or completely at fault for an accident, DCPD will cover your vehicle, its attached components (such as the dashboard infotainment system), and the loss of use of your vehicle.

 Instead of using the other driver for damages, DCPD requires you to deal with your insurer directly.

Benefits for Accidents

If you are wounded in an auto accident, accident benefits will cover your medical expenditures and rehabilitation costs regardless of whether you were at fault for the accident. 

You might choose to increase your accident benefits coverage limit. Speak with your broker about your alternatives.

Uninsured Vehicle:

If you are in an accident with an uninsured motorist or an unknown driver who performs a hit-and-run, your uninsured auto policy will pay for vehicle damage.

What is the Cost of Commercial Auto Insurance?

A commercial auto insurance policy's cost is determined by various factors, including:

  • Your driving record and years of driving experience
  • What kind of vehicle do you drive
  • Your gender and age
  • Where you reside or where you usually park your vehicle
  • How many kilometers do you drive each year?

Depending on these and other factors, different insurers charge different premiums. That is why it is beneficial to have a broker shop around on your behalf to get you a policy that meets your demands at a reasonable price.

Are There any Commercial Auto Insurance Savings Available?

If you have a commercial auto insurance policy, you may be eligible to get a discount if you:

You have no claims and a spotless driving record.

You have more than one commercial insurance policy with the same business.

On a commercial auto insurance policy, you might save up to 15% or more. Speak with your broker about your eligibility and the steps you can take to reduce your annual premium. 

For example, if your firm has five or more vehicles, inquire about a commercial fleet insurance policy, which is often less expensive than acquiring individual commercial auto policies for each vehicle.

Is it Legal to Drive a Pickup Truck as a Commercial Vehicle?

Pickup trucks are considered commercial motor vehicles in most provinces if they are utilized for commercial or business purposes. However, you should verify with your provincial transportation ministry to see if your pickup truck is considered a commercial vehicle.

Read Also: What is Car Insurance?


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